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#1 Larry

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Posted 19 February 2014 - 03:26 PM

before I start here's a primer on Bitcoin



If you can't spare the minute and a half to watch the video (and to add more info to the video)

Bitcoin is

1) digital currency and can be compared to gold

2) like gold, bitcoin is mined via a computer program, and there is a certain number of bitcoin produced every 10 minutes right now it's at 25 bitcoin every 10 minutes. In 4 years it will be half that number, and every four years the number of bitcoins produced will be halved.

3) There is a known, immutable supply of bitcoins (again similar to gold, the total amount is finite). There are only 21 million bitcoins that can be mined. After that number is reached, you cannot create more bitcoins to add to the supply.

4) bitcoins are stored locally (meaning saved onto your device), bitcoins aren't stored in a central server. Which means that no external power (like a bank or a government) that can freeze your Bitcoin account. This is like storing gold bars under your bed.

5) Bitcoin is a totally fiat currency, very much like the dollar. It isn't backed by anything, and the only value it has is the value that people give to it (again like the dollar).

6) there is no central authority that controls bitcoin. There is no bitcoin central bank, there is no entity to shut down if you want bitcoin gone. It operates peer to peer much like bit torrent clients.

7) bitcoin guarantees total safety and security. It relies on clever cryptographic algorithms to keep transactions safe, and the entire network works together to ensure the integrity of the currency. Basically every bitcoin miner takes a vote to determine if a transaction is legitimate or not. The cryptography has been reviewed by the world's best cryptographers and they have verified that it indeed does what it says it does, in terms of guaranteeing safety.

Now here's the advantages that I can see:

1) Bitcoin is the first and only currency that I know of that is inflation proof. Because you can't create more bitcoins, the value can't be manipulated in that way which means that whatever the final value of bitcoin is, that's it (it might vary on a limited range depending on trading patterns). Politicians can't make bogus decisions to affect the value of your money, which is what is happening now. They can k*ll themselves all they want but they won't be able to affect the value of your money. And if you think about the actual money value you've lost due to rising inflation, you've probably already lost a lot.

2)Bitcoin is universal and is not tied to any country or government. You can use it anywhere, and not have to lose money in arbitrage due to the differing values of each currency.

3) I can transfer it instantly to anyone, anywhere, at anytime, without paying any sort of transaction fees (or paying a very very minimal amount as compared to the norm), and they will accept my money as if I handed it over to them myself. Now what this means on a macro scale especially for the philippines is staggering. right now there are millions of pesos transferred by OFWs to their families in the Philippines. But a huge portion of that money doesn't get transferred all the way since that portion gets chewed up by the money transfer companies in the form of fees (and transferred back to their richer countries of origin), now imagine if that whole amount gets transferred directly to the people here?

4) it is valuable as f*ck. When I first heard of Bitcoin in 2012, the value was 20 USD to 1 Bitcoin. NOW, the average value of bitcoin (across the different exchanges) is 750 USD to 1 bitcoin. So 1 Bitcoin is roughly around 30k Pesos. and it will only rise in value given the nature of the currency. They're projecting that bitcoin will eventually reach a value of 1500 USD.

----

this is all very exciting, especially since this is groundbreaking. Bitcoin basically democratizes money. It puts the control of money back to the person who actually owns it, and away from the bankers and the governments in the world. What this means, is that it will eventually level the playing field in terms of money.

but bitcoin is not without its faults, right now trading in bitcoin is almost like a gamble. The value fluctuates very wildly, I've read of accounts of the bitcoin market experience a crash of 400 dollars and then rebound back by another couple of hundred in a matter of minutes (which is scary if you have money in bitcoin), plus there's the high possibility of the big banks buying up large amounts of bitcoin and dumping it all back in a pump and dump scheme to crash the market. Also bitcoin is not the only currency of its kind out there, there are 100 other crypto currencies in existence and are being actively traded, each of them hold different value, but I find it hard to see which one will come out on top as each one affects the other.

This is fascinating to me, because right now we're seeing things change in finance, in the same way that the mp3 changed the music industry. We're right at the cusp of something big, whether that something big will be good or bad in the long run remains to be seen, but these are exciting times.

#2 sonnyt111

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Posted 19 February 2014 - 05:00 PM

How does one go about purchasing bitcoins? You mentioned that the value of bitcoins can fluctuate in the course of a few minutes. What causes the value to fluctuate? How different is this from stocks and bonds? If there's no regulatory body that oversees bitcoin transactions, isn't this a dangerous thing to be getting into? Is bitcoin technology susceptible to fraud?

How does one go about purchasing stuff using bitcoins? Are there merchants which accept bitcoins? Until today, I've never even heard of the term bitcoin.




#3 filibustero

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Posted 19 February 2014 - 05:22 PM

I think I heard before some dude threw away his hard drive containing a large stash of bitcoin now valued in the millions of dollars. Poor dude.

#4 Larry

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Posted 19 February 2014 - 07:32 PM

How does one go about purchasing bitcoins? You mentioned that the value of bitcoins can fluctuate in the course of a few minutes. What causes the value to fluctuate? How different is this from stocks and bonds? If there's no regulatory body that oversees bitcoin transactions, isn't this a dangerous thing to be getting into? Is bitcoin technology susceptible to fraud?

How does one go about purchasing stuff using bitcoins? Are there merchants which accept bitcoins? Until today, I've never even heard of the term bitcoin.



to acquire bitcoins you can either download a bitcoin miner and use your computer to mine it (something that is discouraged unless you have a room full of computers), or you can purchase bitcoins from an exchange such as coinbase.com, or the easiest way is to sell something in exchange for bitcoins. There's a local bitcoin exchange buybitcoin.ph that launched last year I believe.

Bitcoin value is dictated by fiat the more people who think it's valuable the higher the value gets, and the fluctuations are caused by trading on the numerous exchanges. So for example one entity buys a huge number of bitcoins, that causes the overall supply to lessen on the open market and raises the value of bitcoin. If one entity on the other hand dumps a large amount of bitcoin on the open market the value crashes. The fluctuations are wild because in relation to other money markets, bitcoin is only a $10B market, any major trade would cause it to swing wildly, as compared to USD which is in the trillions, it would take a really huge transaction to affect a large enough swing. The analogy they bring up when explaining the wild fluctuations is that bitcoin is still a small boat, so a large enough financial wave can cause it to change direction, the USD is Titanic, it would take a really big wave to move it even an inch. But if you follow the bitcoin trend over its existence the range of the value swings have gotten narrower and narrower as more and more people are now buying into bitcoin.

It's neither stock or bond, it's actual currency similar to the dollar.

there's no CENTRAL regulatory body, the main regulatory body is the bitcoin network itself that works together to verify each transaction using bitcoin. Think of it as an election done every 10 minutes, every one must agree on the transaction for it be passed off as legit. The verification process is done by the bitcoin miners during the mining process, which makes mining more and more difficult as time passes.

It's dangerous now but I'm thinking it will stabilize after a couple of years, given the trend.

Bitcoin isn't (as far as I know) susceptible to fraud.the technology is open source, anyone can download the code and look into each and every transaction. Each transaction is transparent, everyone can see where each and every bitcoin has been since it was first mined. And each transaction is verified by multiple entities. Bitcoin cannot be duplicated and counterfeited, each coin is unique and cannot be copied. You can however steal bitcoins from the exchanges, and this has happened before and has caused some of the crashes.

if you have bitcoin wallet you just basically transfer coins over the internet. It's as simple as sending an email.

there are currently over 21,000 merchants (mostly online) that accept bitcoin. But the trend is rapidly changing, I've been reading about Bitcoin ATMs popping up in the real world. And Lloyd's of London has now a special insurance to insure the bitcoins in your wallet. I've also been reading about services that accept bitcoin, from taxi drivers, to escort services.

This is huge bro, it's like watching the birth of the internet all over again.

#5 Larry

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Posted 19 February 2014 - 07:40 PM

I think I heard before some dude threw away his hard drive containing a large stash of bitcoin now valued in the millions of dollars. Poor dude.



yeah I read about that.

he was one of the early miners, and with a brainfart he decided to buy a new hard drive and threw away his old one

I think the total value of his bitcoin wallet was somewhere around 9M USD, and there were reports that there groups of people with metal detectors trawling garbage dumps in the UK (where it happened) looking for his hard-drive.

there was this other kid, who was down on his luck, posted on reddit.com asking what he should do, apparently he was strapped for cash and couldn't pay his student loans and was behind on his rent etc. etc., so he consulted reddit and told them that he had some bitcoins. When they asked how many bitcoins he had, he said 917 bitcoins. His bitcoin wallet made him a millionaire, and turned his life around literally.

----

my biggest regret about this, is that I didn't take Bitcoin seriously when I learned about in 2012. Some guy told me about this but I was hesitant to put my money into something that I thought was Monopoly money lol. Now that I'm reading all about this in the news, man I could never have been more wrong.

Now, I'm looking at other crypto currencies to gamble on.

#6 filibustero

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Posted 19 February 2014 - 08:04 PM

yeah I read about that.

he was one of the early miners, and with a brainfart he decided to buy a new hard drive and threw away his old one

I think the total value of his bitcoin wallet was somewhere around 9M USD, and there were reports that there groups of people with metal detectors trawling garbage dumps in the UK (where it happened) looking for his hard-drive.

there was this other kid, who was down on his luck, posted on reddit.com asking what he should do, apparently he was strapped for cash and couldn't pay his student loans and was behind on his rent etc. etc., so he consulted reddit and told them that he had some bitcoins. When they asked how many bitcoins he had, he said 917 bitcoins. His bitcoin wallet made him a millionaire, and turned his life around literally.

----

my biggest regret about this, is that I didn't take Bitcoin seriously when I learned about in 2012. Some guy told me about this but I was hesitant to put my money into something that I thought was Monopoly money lol. Now that I'm reading all about this in the news, man I could never have been more wrong.

Now, I'm looking at other crypto currencies to gamble on.


So if the amount of bitcoins that can be mined is limited, does this mean that the world market just lost X number of bitcoins because it's now in the dumps somewhere, with the likely scenario that the hard drive is now corrupted and all its data lost?

#7 swynd

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Posted 19 February 2014 - 09:32 PM

yeah I read about that.he was one of the early miners, and with a brainfart he decided to buy a new hard drive and threw away his old oneI think the total value of his bitcoin wallet was somewhere around 9M USD, and there were reports that there groups of people with metal detectors trawling garbage dumps in the UK (where it happened) looking for his hard-drive.there was this other kid, who was down on his luck, posted on reddit.com asking what he should do, apparently he was strapped for cash and couldn't pay his student loans and was behind on his rent etc. etc., so he consulted reddit and told them that he had some bitcoins. When they asked how many bitcoins he had, he said 917 bitcoins. His bitcoin wallet made him a millionaire, and turned his life around literally.----my biggest regret about this, is that I didn't take Bitcoin seriously when I learned about in 2012. Some guy told me about this but I was hesitant to put my money into something that I thought was Monopoly money lol. Now that I'm reading all about this in the news, man I could never have been more wrong. Now, I'm looking at other crypto currencies to gamble on.


But that's exactly what it is... a gamble.... and sometimes gambles pay off big time, sometimes... :D Hindsight is 20/20

So if the amount of bitcoins that can be mined is limited, does this mean that the world market just lost X number of bitcoins because it's now in the dumps somewhere, with the likely scenario that the hard drive is now corrupted and all its data lost?


That's correct.

#8 lovejones

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Posted 19 February 2014 - 10:47 PM

so you can't buy anything with it, like a car, right? and the only way a person with this bitcoin can get money from it is if someone buys it?

i dunno, man. it's not something tangible that i can put in my hands on and value. it might look like stocks but it isn't because you're not investing on the fortunes of a company but something that doesn't even exist in three dimensions. it's also not like buying art because you can't look at them to appreciate them and you can't be sure that their value will actually appreciate in the future because, well, it's not really real. and since they're just made of 1s and 0s, sooner or later some hacker would be able to wreak havoc on the whole concept.

#9 swynd

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Posted 20 February 2014 - 12:32 AM

so you can't buy anything with it, like a car, right? and the only way a person with this bitcoin can get money from it is if someone buys it?

i dunno, man. it's not something tangible that i can put in my hands on and value. it might look like stocks but it isn't because you're not investing on the fortunes of a company but something that doesn't even exist in three dimensions. it's also not like buying art because you can't look at them to appreciate them and you can't be sure that their value will actually appreciate in the future because, well, it's not really real. and since they're just made of 1s and 0s, sooner or later some hacker would be able to wreak havoc on the whole concept.


There are small / underground economies that accept bitcoins. The most popular one until recently is the illegal drugs shop Silk Road. Now THAT was massive. The only reason you can't buy a car from a name brand shop is because they don't accept it. I'd venture that you might be able to get a second hand car though.

Bitcoins are an extreme form of fiat currency. In a way, it's the purest form of value due to demand. There's really nothing else to it except demand. Never heard of World of Warcraft gold trading? Sure it's just game money, but whole enterprises built themselves around farming game gold to be sold to WoW players. I'm not saying Bitcoins are the future, and that they're here to stay, but to dismiss it because it's just 1's and 0's is ignore the reality that it's "real" in the sense that you can profit from it. The only reason it's "trusted" somewhat is that it's an extremely clever tech that makes it nearly impossible to hack if your purpose is to forge it.

But yes, it's open to attack as much as a weakly designed currency is open to being forged. And yes, Bitcoin has a weakness. The weakness going (more) public recently caused it's value to drop. This drop is really big as literally millions of fortunes depend on its value. Some might say it's time to buy, lol. We'll see how the bitcoin adjusts to this. No it's not about forging or stealing the bitcoin, but there's a way to mess it up such that it may lead to some... confusion.

Edited by swynd, 20 February 2014 - 12:33 AM.


#10 Bugatti Veyron

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Posted 20 February 2014 - 03:25 AM

This sounds a bit complicated. Like a computer game app that kids play. Only this is for real. Since it's border less and international in character and there's no government regulators like the SEC which oversees the operations and transactions of the players, there is always the possibility of fraud. I mean if governments can unleash worms such as stuxnet to undermine/sabotage economies, what's to prevent a hacker from infecting the open source code? And what happens if you have millions of bitcoins on your hard drive, but for some reason, the hard drive is corrupted? Can you back up your transactions on another hard drive? I suspect you can't. Otherwise you can become a victim of theft if someone manages to back up your transactions on their portable hard-drives. Still, one could literally k*ll the owner of a hard drive containing millions of bitcoins and steal the victim's hard drive.

This is basically a pure economic model of supply and demand with laissez-faire or non-government intervention thrown in for good measure. It's as if the developers of this bitcoins technology were inspired to introduce the concept by engaging in some form of games app which they eventually decided they could apply to the real world.

Many questions need to be asked regarding this interesting but complicated technology.

#11 Larry

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Posted 20 February 2014 - 10:40 AM

so you can't buy anything with it, like a car, right? and the only way a person with this bitcoin can get money from it is if someone buys it?

i dunno, man. it's not something tangible that i can put in my hands on and value. it might look like stocks but it isn't because you're not investing on the fortunes of a company but something that doesn't even exist in three dimensions. it's also not like buying art because you can't look at them to appreciate them and you can't be sure that their value will actually appreciate in the future because, well, it's not really real. and since they're just made of 1s and 0s, sooner or later some hacker would be able to wreak havoc on the whole concept.


well you actually can buy a car with it, just exchange your bitcoins for pesos and then go buy your car with that, that's the easiest way

but yes there are car dealerships that accept bitcoin

Tesla (TSLA)- Not only that, but regular brick-and-mortar stores are accepting Bitcoins too. A Lamborghini dealership in Newport Beach, Calif. blogged they accepted Bitcoin in the recent purchase of a Tesla, made for $103,000. The company also wrote they quickly picked up their second customer using Bitcoin. As the digital currency expands and becomes more better defined by regulators, expect this list of companies that support Bitcoin to be longer and longer.

Read more: http://www.nasdaq.co...8#ixzz2tpGvNXzV


it's very real currency, and the fact that the number of businesses and establishments are accepting it only makes it more real.

there are pubs in the UK that will sell you drinks for bitcoin.

it's as real as the dollar, in that it's also not backed by anything like the dollar (the dollar hasn't been backed by gold for decades now). and that the value of the dollar is largely dependent on the belief that it has value.

#12 Larry

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Posted 20 February 2014 - 10:54 AM

There are small / underground economies that accept bitcoins. The most popular one until recently is the illegal drugs shop Silk Road. Now THAT was massive. The only reason you can't buy a car from a name brand shop is because they don't accept it. I'd venture that you might be able to get a second hand car though.


yep silk road and the Darknet was my first encounter with Bitcoin. SR going down had a huge effect on bitcoin, and when it was raided and Ross Ulbricht was arrested many speculated that Bitcoin would die. But here we are months later and bitcoin is still rolling along.


But yes, it's open to attack as much as a weakly designed currency is open to being forged. And yes, Bitcoin has a weakness. The weakness going (more) public recently caused it's value to drop. This drop is really big as literally millions of fortunes depend on its value. Some might say it's time to buy, lol. We'll see how the bitcoin adjusts to this. No it's not about forging or stealing the bitcoin, but there's a way to mess it up such that it may lead to some... confusion.


I beg to disagree.

Going public only made bitcoin stronger, if you trace back the trend when Bitcoin was used as almost an exclusive currency on SR, the value was somewhere around 20. Now that it's going mainstream the value is now more than 40 times what it was. That's huge, and as more people start trading in it and using it for transactions it's only going to get stronger AND more stable. The adoption rate for bitcoin is almost like that of email when it first came out, or mp3's, and there's nowhere to go but up.

The REAL weakness of bitcoin is not in the bitcoin technology itself, but in the exchanges. The huge swings and instability are caused by bitcoin exchanges that have weak security protocols and weak systems that prevent the currency from being traded properly. Right now, one of the major bitcoin exchanges Mt. Gox is under fire for exposing a flaw in their security and has stopped withdrawals from their exchange which caused a huge uproar in the market, since they f#&ked up everything for everyone. Bitcoin in itself is almost flawless in its execution.

#13 Larry

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Posted 20 February 2014 - 11:31 AM

This sounds a bit complicated. Like a computer game app that kids play. Only this is for real. Since it's border less and international in character and there's no government regulators like the SEC which oversees the operations and transactions of the players, there is always the possibility of fraud.


To me that's the beauty of bitcoin, that it's not centralized and no one has total control over it. Governments can't artificially inflate it as we've seen in the dollar, and banks can't embargo and freeze your assets. Your money belongs to you. period. It's amazing.

the possibility of fraud is virtually nil.

you can't duplicate a bitcoin. Its complex cryptography and algorithms prevents a bitcoin from being counterfeited, plus each and every transaction is transparent, and is verified constantly by the network itself. It's virtually impossible to do.

I mean if governments can unleash worms such as stuxnet to undermine/sabotage economies, what's to prevent a hacker from infecting the open source code?


They've tried I believe, and they couldn't do it. Hacking the code would result in the same thing, there's no central server to hack, and everything is transparent and available to view by anyone at anytime.

Governments and banks are very concerned about this, but hacking it is out of the question. They're trying to bring it down by other means though. When Silk Road was busted, Silk Road 2 came out just a few months later and it too was brought down. The thing is the bitcoin that was earned by Silk Road 2 was suddenly missing, and we're talking about thousands of coins. People are speculating that the government took the coins and are amassing a huge amount to dump back in the market to crash the value. We'll see.

And what happens if you have millions of bitcoins on your hard drive, but for some reason, the hard drive is corrupted?

The same thing that happens to the money in your wallet if it suddenly catches fire.

Can you back up your transactions on another hard drive? I suspect you can't.

yes you can

you can back it up on multiple devices, protect it with as many passwords as you want. You can even back it up on a piece of paper. write down the PIN code to a separate wallet on a piece of paper, and lock it down in a safe or a safety deposit box.

Otherwise you can become a victim of theft if someone manages to back up your transactions on their portable hard-drives.
Still, one could literally k*ll the owner of a hard drive containing millions of bitcoins and steal the victim's hard drive.


These things can happen with traditional currency too.

someone can rob my bank, or steal my wallet, or they can k*ll me and have access to my home safe. it's the same thing basically. Personal security doesn't factor in the stability of bitcoin, since it requires the same level of prudence and common sense to keep your bitcoins safe, as with your traditional currency.

This is basically a pure economic model of supply and demand with laissez-faire or non-government intervention thrown in for good measure. It's as if the developers of this bitcoins technology were inspired to introduce the concept by engaging in some form of games app which they eventually decided they could apply to the real world.

Many questions need to be asked regarding this interesting but complicated technology.


true

though I can't say what motivated the creators of the technology specifically (even the story of how bitcoin was invented by Satoshi Nakamoto is fascinating) I can see the beauty of this technology.

Taking away the power from the powers that be, giving it back to the people, that's amazing, especially in finance. This is the exact same feeling that the world had when mp3's came out, the music industry was rattled, the public was excited but cautious, and not everyone bought into it, but when it gathered steam, it totally changed the way we experienced music, and turned the industry on its head. Same thing with email, and online shopping. when online shopping and banking first came out, everyone was like "f#&k that, that s@%t's not safe" but fast forward to today, everyone's doing it.

Cryptocurrency is here to stay IMO, and more and more people are starting to recognize it.

you can now pay the IRS in bitcoin and the IRS is now studying how to tax income derived from bitcoin. and as I stated Lloyds of London (the world's oldest insurer) is now underwriting insurance for your Bitcoin wallet. These are legitimate organizations recognizing cryptocurrency as a valid form of payment at par to traditional currencies. That's a sign that bitcoin is getting to the mainstream, and is definitely not just Monopoly money anymore.

Whether it's bitcoin or some other cryptocoin, the technology is out there, de-centralized money is here to stay. You can't put that genie back in the bottle. What happens next should be exciting.

#14 Bugatti Veyron

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Posted 20 February 2014 - 04:42 PM

To me that's the beauty of bitcoin, that it's not centralized and no one has total control over it. Governments can't artificially inflate it as we've seen in the dollar, and banks can't embargo and freeze your assets. Your money belongs to you. period. It's amazing.

the possibility of fraud is virtually nil.

you can't duplicate a bitcoin. Its complex cryptography and algorithms prevents a bitcoin from being counterfeited, plus each and every transaction is transparent, and is verified constantly by the network itself. It's virtually impossible to do.



They've tried I believe, and they couldn't do it. Hacking the code would result in the same thing, there's no central server to hack, and everything is transparent and available to view by anyone at anytime.

Governments and banks are very concerned about this, but hacking it is out of the question. They're trying to bring it down by other means though. When Silk Road was busted, Silk Road 2 came out just a few months later and it too was brought down. The thing is the bitcoin that was earned by Silk Road 2 was suddenly missing, and we're talking about thousands of coins. People are speculating that the government took the coins and are amassing a huge amount to dump back in the market to crash the value. We'll see.


The same thing that happens to the money in your wallet if it suddenly catches fire.


yes you can

you can back it up on multiple devices, protect it with as many passwords as you want. You can even back it up on a piece of paper. write down the PIN code to a separate wallet on a piece of paper, and lock it down in a safe or a safety deposit box.



These things can happen with traditional currency too.

someone can rob my bank, or steal my wallet, or they can k*ll me and have access to my home safe. it's the same thing basically. Personal security doesn't factor in the stability of bitcoin, since it requires the same level of prudence and common sense to keep your bitcoins safe, as with your traditional currency.



true

though I can't say what motivated the creators of the technology specifically (even the story of how bitcoin was invented by Satoshi Nakamoto is fascinating) I can see the beauty of this technology.

Taking away the power from the powers that be, giving it back to the people, that's amazing, especially in finance. This is the exact same feeling that the world had when mp3's came out, the music industry was rattled, the public was excited but cautious, and not everyone bought into it, but when it gathered steam, it totally changed the way we experienced music, and turned the industry on its head. Same thing with email, and online shopping. when online shopping and banking first came out, everyone was like "f#&k that, that s@%t's not safe" but fast forward to today, everyone's doing it.

Cryptocurrency is here to stay IMO, and more and more people are starting to recognize it.

you can now pay the IRS in bitcoin and the IRS is now studying how to tax income derived from bitcoin. and as I stated Lloyds of London (the world's oldest insurer) is now underwriting insurance for your Bitcoin wallet. These are legitimate organizations recognizing cryptocurrency as a valid form of payment at par to traditional currencies. That's a sign that bitcoin is getting to the mainstream, and is definitely not just Monopoly money anymore.

Whether it's bitcoin or some other cryptocoin, the technology is out there, de-centralized money is here to stay. You can't put that genie back in the bottle. What happens next should be exciting.

What do you suppose will happen to the banking industry world-wide if bitcoin becomes the preferred mode of currency sometime down the line? Since banks and governments can't regulate it, and can't put liens on your bitcoins, what will happen to off-shore banking havens and Swiss bank accounts? Will the adoption of bitcoin technology spell the doom for these banking entities? And what about the mainstream banking system itself? How will this be affected if bitcoin technology becomes a success?

#15 Ryuji_tanaka

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Posted 20 February 2014 - 05:26 PM

Unfortunately bitcoin values are dropping and central banks around the world are clamping down on it.

#16 maxiev

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Posted 20 February 2014 - 05:31 PM

To me that's the beauty of bitcoin, that it's not centralized and no one has total control over it. Governments can't artificially inflate it as we've seen in the dollar, and banks can't embargo and freeze your assets. Your money belongs to you. period. It's amazing.

Governments and banks can control the price of bitcoins by buying up huge amounts then dumping these on the market, bringing down the value of the bitcoins.

Just another point of clarification. Are bitcoins supposed to replace the current monetary system we have in place today all around the world? Or are bitcoins merely going to complement regular currency? I would hazard a guess that those who will be most likely to use bitcoins are those involved in underworld activities such as money laundering, the drug trade, ill gotten wealth, etc.

Any activity wherein governments could potentially freeze/sequester/confiscate currencies would best be served by using the bitcoin technology.

#17 Larry

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Posted 20 February 2014 - 06:16 PM

What do you suppose will happen to the banking industry world-wide if bitcoin becomes the preferred mode of currency sometime down the line? Since banks and governments can't regulate it, and can't put liens on your bitcoins, what will happen to off-shore banking havens and Swiss bank accounts? Will the adoption of bitcoin technology spell the doom for these banking entities? And what about the mainstream banking system itself? How will this be affected if bitcoin technology becomes a success?


they will have to adapt or die much like what happened in the music industry. there will be some small banks that will accept an initial loss but take advantage of the situation and win in the end.

Banks I imagine will come up with different services, maybe some that we won't recognize, because with Bitcoin, you are your own bank.

if they're smart and realize what bitcoin is, they can adapt early and modify their model.

#18 Larry

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Posted 20 February 2014 - 06:29 PM

Unfortunately bitcoin values are dropping and central banks around the world are clamping down on it.


the current crash isn't because of the Bitcoin technology, it's largely due to Mt. Gox tanking, and given the volume that goes through that exchange it screws things up for everyone.

not all central banks are opposed or are clamping down on bitcoin, china, russia, iceland (i think), and some others are warning against the use of bitcoin but haven't really done any steps to stop it. france wants to regulate it via law and licensing, croatia has accepted it as a mainstream currency, and so on. So even some central banks are taking a wait and see attitude given the momentum that bitcoin has.

it's really very interesting times

#19 Larry

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Posted 20 February 2014 - 06:54 PM

Governments and banks can control the price of bitcoins by buying up huge amounts then dumping these on the market, bringing down the value of the bitcoins.


not really, it would take a singular entity a whole lot of money, literally ship loads of it

to effect a massive crash via pump and dump, you'd have to buy 5-10% of all bitcoin currently in existence, at currently 11 million bitcoins mined, that's a lot of bitcoin to buy.

everytime you buy bitcoin you'd be driving the price up, and if you were going for 5-10%, you'd be paying almost $100M easy for the last few bitcoins to reach that 5-10%, that's a lot of printed money.

in fact they might resort to their time-tested tactic of printing up more just to make up that amount. And the economic effect of that would be staggering.

Just another point of clarification. Are bitcoins supposed to replace the current monetary system we have in place today all around the world? Or are bitcoins merely going to complement regular currency? I would hazard a guess that those who will be most likely to use bitcoins are those involved in underworld activities such as money laundering, the drug trade, ill gotten wealth, etc.


I'd like to see bitcoin or another cryptocurrency reach that level, who knows really if it will replace or co-exist with traditional currencies, only time will tell, but bitcoin and cryptocurrency is here to stay.

well I can see how shady people can use bitcoin for illegal activity, but it's too much of a generalization to say that only those who are doing shady stuff would be dealing in bitcoin, especially now that there are over 21000 legit businesses operating with bitcoin.

Also, printed paper money has and will still be used for nefarious activity. Money is money, period. What you use it for isn't the money's fault. It's like fire, you can use it to cook you a meal or heat your house, but you can also burn other people's houses with it, now it's not fire's fault that it can be used destructively.

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now is bitcoin complicated, of course. Despite all I've read, I still don't really understand half of it, it's sophiticated and complex, but the main benefit is undeniable.

I would rather have a decentralized currency, than one where banks have direct control over the value of my money, have the power to print it out of thin air, and then lend it to me at interest and expect me to slave away and repay that fake debt they created when they printed it out of nothing.

#20 Larry

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Posted 20 February 2014 - 06:58 PM

What are the advantages of Bitcoin?

Payment freedom - It is possible to send and receive any amount of money instantly anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows its users to be in full control of their money.

Very low fees - Bitcoin payments are currently processed with either no fees or extremely small fees. Users may include fees with transactions to receive priority processing, which results in faster confirmation of transactions by the network. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.

Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.

Security and control - Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.

Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.


What are the disadvantages of Bitcoin?

Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.

Volatility - The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.

Ongoing development - Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.

https://bitcoin.org/...ages-of-bitcoin




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